The Government’s response to the Financial System Inquiry (FSI) around the Life Insurance Framework (LIF) and minimum education standards for financial advisers did not mean it was an open and shut case as details were yet to be worked out, the Association of Financial Advisers (AFA) said.
Speaking at the AFA Conference in Cairns, chief executive, Brad Fox, addressed the issue of extending the clawback period to three years and its purpose of dealing with the perception of the churn problem.
But he argued that there were no specific details and statistics around churn, nor were there concrete definitions on what constituted churn.
“We’re not happy with those outcomes being given to us and told that’s it,” he said.
Fox maintained that if clawback had to be three years, years two and three should be restricted to only apply when their own adviser replaced their clients’ policy.
“If that can’t be done, then three years can’t work,” he said.
Fox also said he would meet with the Treasury working group this week to clarify the details around minimum education requirements
“Sounded like we need to get a degree but again the details aren’t there yet. This is also going to be a very important part of what were advocating on behalf of advisers,” he said.
AFA national president, Deborah Kent, said that existing advisers were deeply concerned about transitional arrangements and whether they would have to attain a degree.
But she said that if the industry was to boost public perception of financial advice, it had no choice but to lift education standards.
“I think if you’re not starting to think about what we need to do we really should start doing it now,” she said.
“Think about where you want to be and start getting on the train and doing it now.”
